How long do you think it will take for a Bitcoin exchange-traded fund to debut on Wall Street? Now that the United States Securities and Exchange Commission is under new leadership, the prospect of a Bitcoin ETF is once again the talk of the town. The SEC has resumed its evaluation of pending ETF applications, and a few of them are tied to digital currency assets. According to market analysts who keep a finger on the pulse of the ETF beat, it's likely we'll see such a fund emerge in a couple of years.
Todd Rosenbluth, an analyst with CFRA, was recently interviewed by CNBC about his feelings towards the SEC and a potential approval of Bitcoin ETF filings presented by the likes of Fidelity Investments. The SEC will not run out the clock on reviewing these applications, but adjudicators are bound to keep a close eye on the cryptocurrency markets in order to get a sense of volatility, transparency, and regulatory compliance. There is a lot of business that could be generated by having Bitcoin ETFs trading on Wall Street, and this is something that SEC evaluators surely know about.
The first step for the SEC will more than likely consist of extending the evaluation period beyond April 29 this year. Once this happens, the CFRA does not see an approval or rejection being announced in 2021. The SEC does not normally issue extensions unless evaluators feel that an approval may be worth considering. In other words, rejections tend to be issued a lot faster.
As for Wall Street investment banking firms, they are pretty anxious about this situation. Clients are clamoring for instruments that do not require them to put too much skin in the game with relation to Bitcoin and other digital currencies; at the same time, they are not terribly attracted to Bitcoin futures trading on the Chicago Mercantile Exchange; they want a closer proxy to the cryptocurrency markets, but not necessarily a derivative or even a trust. At this point, what Wall Street investors really want is something they can buy and sell in the same fashion as stocks.